Retirees and the growing debt mountain

Brits aged 65-74 are taking on more debt at an alarming rate, according to worrying new research from the Centre for Economics and Business Research.

While total debt stood at £78 billion at the end of 2017, this is predicted to rise to £86 billion by the end of 2018, which would represent an increase of £8 billion.

And as the graph below shows, rising debt in over 65s is by no means a new trend.

The research, which was commissioned by equity release lender More 2 Life, included all forms of secured and unsecured debt in its calculations.

We should stress that it's not always a huge problem to be retired and in debt. For example, you might have taken out a small loan to improve your home that can easily be covered by your existing annuity income. Or you might just be making savvy use of cashback or 0% credit cards.

That said, it's generally best to avoid being deep in the red when you're in or nearing retirement.

If you find yourself in this boat, here are nine steps you can take to get back in the black.

Use your savings or pension

If you do have savings, it usually makes sense to use them to pay off your debts rather than carry on paying higher rates of interest. That’s particularly true right now as savings rates are so terrible.

Carry on working / Go back to work

It’s not the answer most older people want to hear but working, even part-time, means you still have an income still coming in.

Of course, there’s the small matter of finding a job and the costs associated with working, such as transport, but if you are able to find a job that pays a decent salary then it is definitely worth considering.

Make cutbacks

You might already have cut back as far as you can. If you haven’t, and you’re struggling, then it’s time to take a look at your household budget.

Write down all your spending for a month and take a look at areas where you might be able to save money.

For example, can you use your car less, or stop eating out? It’s tough, but short-term pain can reap long-term gain.